byronslist.com

A pleasant windfall for First Time Homebuyers this year as President Obama signs into law an $8,000 tax credit or 10% of the homes value (which ever is less) for would be Home Buyers for 2008 or 2009 Taxes. This much needed relief comes during a time of recent Economic Stimulus Bills, geared towards helping jump start the economy and housing market by making a CASH incentive for First Time Home buyers to make 2009 the year they purchase their home.

So you may be thinking "I will qualify as a first-time home buyer, and I am currently set to get a small tax refund for 2008. Does that mean if I purchased now that I would get an extra $8,000 added on top of my current refund?"

The short answer? Yes, you would get back the $8,000 plus what you overpaid. The long answer? Well, it depends...

Here are three scenarios I got from CNNMoney.com :

Scenario 1: Your final tax liability is normally $6,000. You've had taxes withheld from every paycheck and at the end of the year you've paid Uncle Sam $6,000. Since you've already paid him all you owe, you get the entire $8,000 tax credit as a refund check.

Scenario 2: Your final tax liability is $6,000, but you've overpaid by $1,000 through your payroll withholding. Normally you would get a $1,000 refund check. In this scenario, you get $9,000, the $8,000 credit plus the $1,000 you overpaid.

Scenario 3: Your final tax liability is $6,000, but you've underpaid through your payroll withholding by $1,000. Normally, you would have to write the IRS a $1,000 check. This time, the first $1,000 of the tax credit pays your bill, and you get the remaining $7,000 as a refund.

To qualify for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers may not have owned a home for the past three years to qualify as "first time" buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit. This is some very important fine print to read.